Senate acts to keep jobs at home

WASHINGTON  The Senate voted Thursday to prevent federal contractors from using taxpayer dollars to move American jobs offshore.

Associated Press

Published
12:00 am EST, Friday, March 5, 2004

"You may be able to do that with your own money. The question is, should you be able to do that with the taxpayers money?" said Sen. Christopher J. Dodd, the Connecticut Democrat who proposed to ban outsourcing in federal contracts.

Numerous Republicans criticized the idea as a step away from friendly world trade, and they warned that the ban might result in a backlash.

"Sometimes I think we dont think it through when we do these broad, over-sweeping things like preventing government outsourcing," said Sen. Orrin Hatch, R-Utah.

"I think we should be wary of retaliation against U.S. companies who get awarded foreign government contracts," he said.

The Senate passed the measure 70-26.

Opponents demanded and won a change that prevents the policy from taking effect until the Commerce Department proves the ban wouldnt hurt the economy or lead to more job losses.

It also makes an exception for defense, homeland security and intelligence contracts deemed necessary for national security.

If signed into law, the ban would stop contractors from moving work offshore in cases where the government privatizes work once done by federal employees, when the federal government contracts for goods and services, and when state governments contract work using federal funds.

The contracting restrictions are part of the fallout from the uproar that broke out when N.

Gregory Mankiw, chairman of the presidents Council of Economic Advisers, suggested that sending American jobs overseas was good for the U.S. economy in the long run. Mankiw later apologized but said he had been misunderstood.

The comment has been rehashed repeatedly this election year, particularly by Democrats critical of how the economy and unemployment have fared under President Bush. In the Senate, the battle has played out during debate over a corporate tax cut.

Democrats prepared a stack of amendments to the tax bill to staunch the flow of jobs overseas, guaranteeing more opportunities to remind voters about Mankiws comments.

One proposal would call on companies that export jobs to report how many they are moving, where and why. Sen. John Kerry of Massachusetts, the Democratic presidential nominee, enthusiastically backed the idea, though he has said that no president can stop the trend.

Other Democrats want to strip tax benefits from American companies with offshore operations, or provide federal aid to service workers who lose their jobs to foreign workers.